Page images



sent W. H. Trescott and Walker Blaine as special envoys and threatened Chili with intervention if Calderon were not recognized.

and the country through which the canal should run and that the United States could not, under the Monroe Doctrine, entertain a proposition for a European protectorate.*

In 1884 the Frelinghuysen-Zavalla treaty with Nicaragua was negotiated for the construction of the canal by the United States, the latter guaranteeing the integrity of Nicaragua. But the treaty was not then ratified by the Senate, being held over until the accession of President Cleveland. Cleveland withdrew the treaty without action, as his views did not agree with those of his predecessor.

The next affair that claimed Mr. Blaine's attention was the war between Chili on the one side and Bolivia and Peru on the other. Chili had gained a decided victory over her two antagonists, the armies of the latter being beaten on land and their navies destroyed. After Lima had been occupied by the Chilean forces the President of Peru fled to the interior, and Chili, being unable to negotiate a treaty of peace because the proper authorities were not there, proceeded to annex the nitrate-bearing district of Peru by way of indemnity. The Peruvians then named Señor Garcia Calderon as the head of the government and Blaine instructed our minister to acknowledge him as the de facto President. But the Chilean admiral deposed him and Blaine then

Snow, Treaties and Topics, pp. 342-343. For copy of treaty see Senate Report 1265, p. 20, 55th Congress, 2d session.

Richardson, Messages and Papers, vol. viii., p. 377; Snow, Treaties and Topics, pp. 344-345.

Before the matter was settled Secretary Blaine had retired from the Cabinet and President Arthur had appointed Mr. Frelinghuysen. Upon his accession Frelinghuysen modified the instructions given Trescott and Blaine and they were told to remain neutral.

Blaine had also issued a note to the Spanish-American republics inviting them to send representatives to meet in congress at Washington for the purpose of discussing their common interests and to devise plans for their mutual protection against European intervention. Many of them accepted the invitation, but before the congress met Blaine retired. Frelinghuysen as soon as he came into office abandoned the plan and by this act caused no little ill-feeling. The project was not undertaken until Blaine was again appointed Secretary of State by Presi

dent Harrison.*

Meanwhile the prosperous condition of the country had received a check. The chief agricultural regions in 1881 suffered a destructive drought, which caused the crops to fall off 25 per cent.; the corn crop was the smallest since 1874. But while the financial returns to the farmers were nearly as great as in 1880 because of a rise in prices due to a shortage of grain in

*Crawford's Blaine, pp. 514-516, 536-545, where Blaine's policy is outlined. See also Hamilton's Blaine, pp. 519-520; Stanwood's Blaine, pp. 247-256; Ridpath's Blaine, pp. 335-344.

Europe, still the railways felt the decrease in traffic, their earnings shrinking by about $45,600,000.

By March, 1882, the export of gold in large quantities began, the total for the fiscal year ending June, 1882, being $32,500,000. Furthermore, Europe in 1882 produced large crops which hurt the American exports, not only in quantity but in prices. Wheat, cotton, iron and steel,* and almost all trades felt the change. Beside this the speculators on the exchanges were experiencing a slump in the prices of stocks, bonds, etc.

But the surplus of public revenue continued to raise higher and higher, in the fiscal year 1882 amounting to $145,543,810, and the disposition of this vast sum was now a great problem. But Congress soon found a way out of the difficulty. Instead of reducing taxation, that body proceeded to spend the surplus as rapidly as possible.

The pension disbursements were increased from $27,000,000 in 1878 to about $68,000,000 in 1882 and other appropriations were increased in almost the same proportion. In 1882 President Arthur recommended that the Mississippi River and its tributaries be improved in the interests of commerce. A bill known as the

* See the Report of the American Iron and Steel Association for May, 1883 and subsequent numbers.

In his first annual message to Congress, December 6, 1881, President Arthur said that 789,053 pension claims had been filed since 1860, of which 450,949 had been allowed.- Richardson, Messages and Papers, vol. viii., p. 58.

In his message of April 17, 1882, Richardson, vol. viii., p. 95.

River and Harbor bill (House Bill No. 6242) was thereupon passed by both Houses of Congress, appropriating $4,000,000 for improving the Mississippi and $14,000,000 for other purposes. President Arthur vetoed this bill August 1 as he considered the appropriation extravagant, but it was passed over his veto the next day and became a law.*

Several instances of corruption were also unearthed, the most prominent of which were the so-called "Star Route" cases, in which it was alleged that General T. W. Brady, the second assistant Postmaster-General, Senator Dorsey, of Arkansas, and others, had conspired to defraud the government of enormous sums by an ingenious system of contracts and subcontracts on certain mail routes. Brady and Dorsey were tried on this charge but were acquitted, and the trial only served to furnish campaign material for the next presidential campaign.†

The political sentiment of the country, in the face of Congressional extravagances, and in the light of the exposures of corruption, now underwent a change. The voters stood behind President Arthur in his veto of the River and Harbor bill and at the elections of 1882 the Republicans suffered an overwhelming defeat, their plurality of twelve in the Fortyseventh Congress being turned into a

* Richardson, vol. viii., pp. 120-122; Hoar, Autobiography, vol. ii., pp. 112-119; Noyes, American Finance, pp. 89-90; McPherson, Handbook of Politics, 1882. pp. 175-179, 202–203.

Andrews, Last Quarter-Century, vol. i., pp.



Democratic plurality of seventy-eight in the Forty-eighth. New York turned a Republican plurality of 43,000 (for Cornell) into a Democratic plurality of 192,000; and Pennsylvania, Connecticut, Massachusetts, Michigan, Kansas, Colorado, and California also elected Democratic governors. This change meant a revision of the revenue schedules but the protectionist Republicans now executed a clever move. Before the political complexion of Congress changed, that body passed a bill which was signed by the President May 15, 1882, appointing a committee of nine (not members of Congress) to investigate the tariff question and to report the next December.* This committee was protectionist, with John L. Hayes, president of the Wool Manufacturers' Association, at its head. Congress also passed at this session a Civil Service bill, providing for a nonpartisan commission of three members, and an act reducing the postage on letters throughout the country to two cents.

On December 4, 1882, the report of the tariff commission, covering 2,500 printed pages, was presented to Congress and an average reduction of 20 per cent. was recommended, a reduction which was an unwilling "concession to public opinion." This reduc

[ocr errors][merged small]


tion applied tion applied to commodities of necessary general consumption, to sugar and molasses, rather than to luxuries and to raw rather than to manufactured materials.'*

An internal revenue bill was introduced in the House and the Senate tacked on the tariff bill containing some of the reductions recommended by the commission. The act of March 3, 1883,‡ as finally passed (in the Senate 32 to 31, in the House 152 to 116) abolished the taxes on bank checks, on watches, on savings-bank deposits, on patent medicines and perfumeries and on the capital and deposits of banks; it also reduced the duties on tobacco by one-half. The loss in internal revenues, however,


was not so great as anticipated, as there was a constant gain from the duties on spirits and fermented liquors.

It was estimated that the loss of internal revenue would amount to about $40,000,000, but the actual loss was less than $22,000,000. With regard to customs duties the act was a disappointment to those who favored a downward revision, for the ratio of duty actually collected to the value of dutiable articles during 1883 was 42.45 per cent., whereas the ratio

[blocks in formation]
« PreviousContinue »